Wednesday, March 29, 2017

What The Heck Just Happened Last Week With The Republican AHCA?

'Welcome to First Grade..of Budget Reconciliation!'
We had a good friend who called to get an explanation of what happened last week when the Republicans abruptly pulled their AHCA health care reform bill of Obamacare which was supposed to be a reform of our previously extant health care system and 'save every American household $2500!' and 'allow you to keep your doctor if you like your doctor!'

Remember those golden oldies?

After a few sentences trying to outline the rules of budget reconciliation and federal budget policy in general, he just stopped me and said:

"Just talk to me like I am a first-grader!"

That is easier said than done but here goes:
  1. 'Health care is very complicated, Junior. So pay close attention to me'
  2. 'You can't always get what you want. But if you try sometimes, well, you just might find, you get what you need'
  3. 'You need to learn to play with your friends. Or else they become your enemies'
  4. 'Getting 70% of a loaf of bread is better than getting none of a loaf of bread. Or anything'
  5. 'The US Senate is different from the US House of Representatives. Or anywhere else on earth'
  6. 'This bill had $1 trillion of tax savings in it. That would help me pay for your college education one day'
  7. 'Now run along and go play outside. That is all I can tell you right now' 
There is no earthly way explaining health care reform can get 'easy' or simple' as many people would like it. The US Senate was set up to protect the rights of the minority party at any time and the parliamentary rules and procedures of the Senate were established to allow full and free debate and an extended amendment process unlike any other legislative body in the world.

Finding ways around and through the parliamentary minefields of the Senate require men and women of extraordinary intelligence and ability. People such as Thomas Jefferson and James Madison crafted them to be as such from our Founding so they hoped there would be others like them who would follow in their stead.

You can determine whether that has happened or not.

Here's some more 'adult' information about the AHCA and why those who say that it was a 'crushing' blow to the Trump White House and Republicans in charge are wrong to assume that we have seen the last of health care reform in this, the 115th Congress;
  1. There was close to $1 trillion in tax savings that were embedded in the AHCA (over 10 years) (see bottom of post)***
  2. There is not just one but two budget resolutions in 2017, primarily due to the fact that no budget resolution was passed in 2016 for the FY 2017 fiscal year that we are about halfway through already here on March 29, 2017. (I know, I know...confusing but life is confusing)
  3. The 1st budget resolution passed the House and the Senate (no Presidential signature needed or veto allowed since it is a 'resolution' of both bodies of Congress, not a US law passed each year) in early January.
  4. This budget resolution was the vehicle by which Republican leadership sought to pass AHCA with simply majority vote +1.
  5. As long as the tax cuts fell below the level of spending cuts under the AHCA repeal of Obamacare, (stay with me here for a little while longer), the bill could be passed by simple majority under budget reconciliation rules and language. (Don't act like a 1st grader and ask: 'Why?' all the time unless you want to read the Budget Control and Impoundment Act of 1974 in its entirety which was one of the 'Watergate Babies' reforms intended to clean up the process post-Nixon Administration days)
  6. If the tax cuts in AHCA didn't fall below the spending cuts, it would increase budget deficits and add to our collective national debt, now at about $21 trillion, and therefore, would not be honored as a special provision of Senate rules and would be open to the 60-vote cloture requirements to get any debate going on any bill there.
  7. The hope was that once the bill got over to the Senate, there would be a surplus of spending savings that would later possibly be applied to the tax cuts that President Trump and the Republicans want to enact during their tax reform act to follow later this summer.
  8. That tax reform effort would be covered under another budget resolution to be passed perhaps by the end of May for FY2018 which would require perhaps ANOTHER $1 trillion of spending cuts in other parts of the federal budget and/or removal of tax exemptions and deductions currently in the tax code in order to 'pay for' the tax rate cuts in a budget-neutral manner so THAT tax reform bill could be passed with a 50%+1 vote instead of being subject to the 60-vote cloture requirement.
So, to boil this all down into some digestible gruel even a first-grader might understand (probably not):
The failure of the House to pass the AHCA and start the process to 'repeal' Obamacare not only puts the 'replace' effort of Obamacare in jeopardy but also makes it more difficult to pass and enact a more simple tax code for everyone later this year.
'Show them what they have won, Johnny!' 

(click through title link if you can't see video)

We don't believe for a minute that this is the last we have seen of the AHCA or efforts to repeal and ultimately replace Obamacare. It does delay it, though and the clock is ticking on the legislative calendar. 

Nothing big ever gets done in an election year. So by December 2017, President Trump and the Republicans in charge of the House and Senate better have some significant success stories to trumpet and run on or else they may feel the heat of the very people who elected them to 'drain the swamp!'; 'clean up this mess!' and 'do their jobs and go home!' (our addition based on our view we should have citizen-politicians who serve perhaps 3 terms in any elective office at any level...and then go back home and do what they were doing prior to elective service)

Stay tuned. Should be an interesting roller-coaster of a legislative year in Washington DC.

***Tax cuts in AHCA (per Americans for Tax Reform)***
-Abolishes the Obamacare Individual Mandate Tax which hits 8 million Americans each year.
This is part of a $270 billion tax cut.
-Abolishes the Obamacare Employer Mandate Tax. This is part of a $270 billion tax cut.
-Abolishes Obamacare’s Medicine Cabinet Tax which hits 20 million Americans with Health Savings Accounts and 30 million Americans with Flexible Spending Accounts. This is a $6 billion tax cut.
-Abolishes Obamacare’s Flexible Spending Account tax on 30 million Americans. This is a $20 billion tax cut.
-Abolishes Obamacare’s Chronic Care Tax on 10 million Americans with high out of pocket medical expenses. This is a $126 billion tax cut.
-Abolishes Obamacare’s HSA withdrawal tax. This is a $100 million tax cut.
-Abolishes Obamacare’s 10% excise tax on small businesses with indoor tanning services. This is a $600 million tax cut.
-Abolishes the Obamacare health insurance tax. This is a $145 billion tax cut.
-Abolishes the Obamacare 3.8% surtax on investment income. This is a $172 billion tax cut.
-Abolishes the Obamacare medical device tax. This is a $20 billion tax cut.
-Abolishes the Obamacare tax on prescription medicine. This is a $28 billion tax cut.
-Abolishes the Obamacare tax on retiree prescription drug coverage. This is a $2 billion tax cut.

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